Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1887-05-20

Richmond, Nay II, 1887.
RICHMOND, Va, May 49, 1887.
Sir Edward Thornton, G. G. B., Chairman
Commission Council Foreign Bondhold-
ers:
Dear Sir,-This subcommittee, represent
ing the committee on the part of the State of
Virginia. was directed by said committee to
advise You, gentlemen, representing the Coun-
Gil of Foreign Bondholders. that it cannot rec
ommend to heGeneralAssembly of Virginia the
acceptance of your proposition as contained
in your communication and memorandum of
to-day. Indeed, it is the sense of the joint
committee that it is useless to report the prop
osition-because
First Taking the indebtedness of the State.
inclusive of the bonds beld by schools and
colleges, and exclusive of the bonds held by
the State other than the Literary Fund, and
after deducting two-thirds. Virginia s portion
of the debt due the United States. we find, by
applying figures to your proposition, that the
whole debt of Virginia for which we would
have to provide interest annually in round num-
bers to be the sum of $32, 900, 000 the annual
interest upon which, at the rates you name,
would equal the sum of 1926, 900. We see no
way by which the State, in her impoverished
condition. can pay such large annual inter
est. To attempt to do go would be worse
than folly. In the first place, it would require
an increase of taxes or a reduction of the
amount constitutional minimum) which the
State now supplies for the maintenance of her
free schools. The committee can do neither;
but permit us to say that if we felt so inclined,
a settlement requiring the increase of the one
or the reduction of the other would be reject
ed by the people In the second place, if we
neither increased taxes nor reduced our ap-
oti tn froa Schools tbara yU0111d al
most Immediately be default of the payment
of the interest agreed upon; and let us re-
mind you that these defaults. g., the States
inability to meet her annually -accruing inter-
est-have been the cause of all legislation hos
tile to her creditors.
Second. We fail to see how you reduce the
principal of the debt to 1928, 600, 900. 1t is
true you offer to allow the State to redeem
some of her obligations at an amount less than
their face value, but after this reduction by
no calculation can we reduce the principal be-
low 1915, 600, 900 or thereabouts. We have con-
scientiously given you what we honestly be-
lieve to be our annual revenues applicable to
the payment of interest on our public debt,
and again express an earnest desire to make a
settlement within our resources, and beg to
submit the following as an evidence of that
desire:
and II. On your first two propositions the
Joint committee consented to the rate of in
terest therein named-to wit, per cent on
consol bonds and q per cent. on 1910 bonds,
on q principal fixed in the fourth proposition
of this memorandum.
III. AS to the third proposition, the COM
mittee could not see their way clear to accept
the funding of past-due coupons as therein
suggested, and resolved to offer in its place
that $500, 900 in cash be set aside to redeem
past-due coupons, at the rate of fifty cents on
the dollar as soon as that sum can be real
lied from revenues or other sources, and that
all coupons maturing up to and including Ju-
ly l. 1887, be redeemed at fifty cents on the
dollar, or funded into Riddleberger bonds at
the rate of fifty cents on the dollar, at the
pleasure of the State.
~. That the principal of the consol bonds
be reduced Immediately to seventy five cents
on the dollar and that of the 10 AUS to sixty
three cents on the dollar; that such reduced
principal of the consols bear interest from Ju-
ly l, 1887, at the rate of per cent. per an
mum, and that of the 10-40's at the rate of 81
per cent. per annum, and that the same shall
be evidenced by stamping in plain characters
said reduced amounts on the bonds and cou-
pons respectively, as they now exist.
V. There will be no difficulty in arranging
the sinking fund as suggested by you.
vi. That all other outstanding bonds be
funded under the Riddleberger bill including
interest from 1885 to July l, 1887, at fifty
cents on the dollar.
VII. That the bonds held by the Sinking
Fund Commissioners either be cancelled or
exchanged for the bonds to be funded under
this agreement in Riddleberger bonds.
VIII. This settlement, by our calculation,
barely brings the debt within our revenues
available for the payment of annual interest
ascertained by the closest collection of taxes
and the most economical administration of our
government. We are satisfied that settle
ment made upon basis that would not come
within these conditions could not be carried
through the Legislature or ratified by the peo-
pie of this State. The details for carrying in
to effect settlement upon this basis will be
the subject of negotiation between us.
We will thank you to furnish us reply as
early as possible.
Yours respectfully,
j. 81. FL. FIGGAT,